Housing loan to go before Stockton City Council again

STOCKTON - There's little doubt at City Hall that Vernell Hill's affordable housing project is a good one.

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By Scott Smith

recordnet.com

By Scott Smith

Posted Mar. 4, 2013 at 12:01 AM

By Scott Smith

Posted Mar. 4, 2013 at 12:01 AM

If you go

The Stockton City Council will meet at 5:30 p.m. Tuesday at City Hall, 425 N. El Dorado St. It is aired live at stocktongov.com or Channel 97.

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If you go

The Stockton City Council will meet at 5:30 p.m. Tuesday at City Hall, 425 N. El Dorado St. It is aired live at stocktongov.com or Channel 97.

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STOCKTON - There's little doubt at City Hall that Vernell Hill's affordable housing project is a good one.

President and CEO of Service First of Northern California, Hill wants to build 82 apartments on Rosemarie Lane for people with special needs - the developmentally disabled, chronically and mentally ill.

It will be called Zettie Miller's Haven.

Not so fast.

Hill first needs Stockton to loan him $760,000 - a relatively small amount of money compared to the total price tag of $18 million. He'll use the money to buy the two-acre vacant plot from the Unity Southern Baptist Church.

With that obstacle cleared, his chances of getting other loans increase dramatically. Construction could begin within a few months.

Hill learned at last week's council meeting - in a spirited debate - what it's like to do business with a city scarred by bankruptcy. It's complicated.

This loan received a 3-3 split vote and failed to pass. (Councilman Michael Tubbs was absent.) It wasn't for otherwise unanimous support for helping the needy residents of Stockton.

"To me, that's just high a level of risk," Councilwoman Kathy Miller said. "I can't get comfortable with that."

Miller was joined in her dissent by council members Moses Zapien and Dyane Burgos. Miller feared that other financing options could dry up, leaving the strapped city even deeper in debt.

Zapien noted that the housing project, which he supported, fell in his district. But he couldn't support the loan.

"We have to look at this as a business," said Zapien, following City Manager Bob Deis' warning to weigh the risks and vote with their "eyes wide open."

The money to be used is from a federal housing grant. But if it weren't paid back, the city would have to scramble to repay it. That could put the city's general fund in jeopardy.

Councilman Elbert Holman voted in favor of Hill's loan with Mayor Anthony Silva and Vice Mayor Paul Canepa. Holman said he put his faith in Hill's belief that the project would be a success and the risk was minimal.

Mayor Silva said the same: "Sometimes life is about taking risks, smart risks."

Hill is facing a tight deadline. The first application for a state grant is coming up Wednesday. He needs the city's loan secured before that, said Hill, who has invested his own money and years of planning.

Pastor Eddie Hare Jr. of the Unity Southern Baptist Church scolded the dissenting council members for casting doubt, which threatened Hill's chances of success.

"If you're going to do something, then you have to think positive," Hare said. "You can't think negative."

Hill's fight for the loan isn't over.

After the vote on the loan, Councilwoman Miller made a second motion, directing city staff to negotiate further with Hare's church for a compromise that decreased the city's exposure to trouble.

"See if we can't come up with a lower level of risk," Miller instructed city staffers. "But allow him to cross the finish line."

Hill's loan is back on Tuesday's City Council agenda under "Unfinished Business."